(Corrects date of workshop in third bullet point to Aug.
1-2)

* Political vacuum casts shadow

* Two of three gas fields rejected by companies last year

* Istanbul workshop for interested companies Aug. 1-2

By Rania El Gamal

BAGHDAD, July 29 (Reuters) - Iraq is considering postponing
an auction for companies who want to develop its gas fields to
give them more time, its oil ministry said on Thursday.

The ministry will hold a workshop in Istanbul on Aug. 1-2 to
discuss details of the gas bidding round and contract terms with
interested bidders.

Baghdad had said it will invite all 45 international
companies, who were prequalified in the two oil auctions last
year, to bid to develop three gas fields and the auction was to
have taken place on Sep. 1.

"It's unlikely it will be at that time (Sep 1), to allow
more time for... the companies," oil ministry spokesman Asim
Jihad told Reuters.

"I think there will be an extension for the period... It
could be by the end of October or start of November, until now
the date has not been agreed upon."

The fields on offer are Akkas in the western desert, Siba in
the southern hub of Basra and Mansuriyah in eastern Iraq.

Kyle McEneaney, head of Ergo's Middle East practice, an
Iraq-focused research firm, said despite interest in Iraq's gas
reserves, there was some uncertainty regarding the auction.

"Discussions in Istanbul should help Iraq to calibrate the
contract terms and set a new auction date; if these things
happen, there will be more concrete interest. If not, expect
more delays," he said.

"The delay in forming a government has given investors in
many sectors pause. Progress on this front will be positive
generally for interest in gas projects; of course, it will be
even more positive if the terms established in Istanbul are not
roundly rejected in Baghdad."

Iraq has no new government since a March election produced
no outright winner.

Two of the gas fields to be tendered -- the 2.1 trillion
cubic feet Akkas field, and Mansuriyah with estimated reserves
of 3.3 trillion cubic feet of gas -- were unsuccessfully put on
the auction block last year.

The third field -- Siba -- had initially been included in
Iraq's second oilfield auction in December but was taken out of
the list of reservoirs on offer because the ministry decided it
was small enough for Iraq to develop on its own.

Iraq has said companies such as Royal Dutch Shell, Total
and South Korea's KOGAS were favoured because of their
experience.

In May, Italy's Edison said it was planning to take part in
the gas auction. Edison and partners including Malaysia's
Petronas, China National Petroleum Corp, Korea Gas and Turkish
Petroleum Corp were the sole bidders for Akkas last year.

Thamir Ghadhban, the top energy adviser of incumbent Prime
Minister Nuri al-Maliki, said the contracts for the gas fields
would be service agreements similar to those given in the oil
auctions but the terms have yet to be finalised.

"One of the modules, is that they (companies) invest and
they produce and operate and they get paid for their cost and
remuneration," he said.

"The idea is that we have to be fair, we have to provide a
fair contract so there is enough turnout because gas does not
have same turnout as oil," he said.

Iraq signed a series of deals after two auctions last year,
which could boost crude production capacity to Saudi Arabia's
levels of 12 million barrels per day from 2.5 million bpd now.

Iraq, starved of power after years of war, sanctions and
economic decline, hopes opening its gas sector to foreign
investment and sealing a gas capture deal with Shell will boost
its power capacity -- seven years after the U.S.-led invasion
the national grid only supplies a few hours of power each day.

"The demand for electricity is intensifying in every sense
of the word," McEneaney said. "This puts a lot of pressure Iraq
to be more flexible in the terms it grants for gas deals if this
will mean getting more gas online, sooner, to its power plants."
(Reporting by Rania El Gamal; Editing by William Hardy and
Anthony Barker)